Current IFRS projects

IFRS Update is an overview of upcoming changes in standards and interpretations issued by the IASB and the IFRS IC as at 30 June 2016 that will be effective for the first-time for reporting periods ended at that date or thereafter. It also summarises key features of selected IASB projects and recent IFRS IC agenda rejection notices.

The IASB and the FASB have issued new requirements for recognising revenue under both IFRS and US GAAP. IFRS 15 Revenue from Contracts with Customers provides a single revenue recognition model based on the transfer of control of a good or service to a customer.

The new revenue standard marks a significant change from current requirements under IFRS. It provides a more structured approach to measuring and recognising revenue, with detailed application guidance. Therefore, adoption may be a significant undertaking for many entities. Early assessment will be key to managing a successful implementation.

The standard is effective on 1 January 2018, with early adoption only permitted under IFRS.

The IASB has issued IFRS 16 Leases, its new leases standard that requires lessees to recognise assets and liabilities for most leases. Lessees applying IFRS 16 will have a single accounting model, with certain exemptions. Lessors applying IFRS 16 will classify leases using the same principle as in IAS 17 and lessor accounting is substantially unchanged. The IASB and the FASB have made different decisions during their deliberations. In some cases, these differences will result in similar transactions being accounted for differently under IFRS and US GAAP.

The International Accounting Standards Board (IASB) issued the final version of IFRS 9 Financial Instruments on 24 July 2014. IFRS 9 brings together the classification and measurement, impairment and hedge accounting phases of the IASB’s project to replace IAS 39 Financial Instruments:Recognition and Measurement and is expected to be effective for annual periods beginning on or after 1 January 2018.

Accounting for dynamic risk management, commonly referred to as macro hedging, does not form part of IFRS 9 and is a separate project.

IFRS 9 introduces principles-based requirements for classification and measurement. Also, the IASB has addressed the key concern that arose as a result of the financial crisis that the incurred loss model in IAS 39 contributed to the delayed recognition of credit losses, by issuing the new impairment requirements that are based on a more forward-looking expected credit loss model. The hedge accounting requirements in IFRS 9 were developed with a view to providing better information about the management activities that involve hedging.

The IASB issued IFRS 10 Consolidated Financial Statements in May 2011, establishing a new definition of control that may significantly change which entities are considered to be controlled, and therefore consolidated. The IASB also issued IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities in May 2011. The IASB and FASB are working jointly to consider issues relating to consolidation accounting for qualifying investment entities.

In addition to the priority projects (i.e., revenue recognition, leases, financial instruments, consolidation and joint arrangements, and insurance), the IASB is currently working on other projects. Coverage of those projects is available:

Latest developments

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